Research
Summaries
BLS expands collective bargaining series
for State and local government
EDWARD WASILEWSKI
The Bureau of Labor Statistics has expanded the coverage
of its series on negotiated wage adjustments in State and
local government collective bargaining units. Beginning with
1984, the series covers all major units-those with 1,000
workers or more . The original series, started in 1979, was
limited to units with 5,000 workers or more . The expanded
series includes data on negotiated wage changes for 2 .1
million workers (about one-half of the State and local government workers who bargain over wages) in 547 bargaining
units . This is twice the number of workers and about six
times the number of units covered by the original series .
The expansion especially improves the series' coverage
of local government workers, who are more likely than State
workers to be in smaller bargaining units. In 1984, local
government accounted for 62 percent of the workers in units
with 1,000 employees or more, compared with 53 percent
in units with 5,000 or more . According to the 1982 Census
of Governments, local government workers made up about
three-fourths of all non-Federal government workers who
bargain over wages .
Settlements in 1984
The expanded series shows that major collective bargaining contracts settled for State and local government
workers during 1984 provided wage adjustments averaging
4 .8 percent in the first year and 5 .1 percent annually over
the life of the contract .' There were 240 State and local
government contracts settled, covering 722,000 workers .
Local government settlements accounted for four-fifths of
the contracts and two-thirds of the workers under 1984 settlements . As shown in table 1, local government settlements
provided larger wage adjustments than those negotiated by
State governments. First-year adjustments averaged 5 .4 percent in local settlements and 3 .6 percent in State government
settlements . Corresponding averages over the life of the
Edward Wasilewski is a labor economist, Office of Wages and Industrial
Relations, Bureau of Labor Statistics .
36
contracts were 5 .9 and 3 .8 percent a year . Sixty percent of
the workers were employed in general government and administration, 20 percent in education institutions, and the
remainder in protective services, health care, and transportation .
On average, State and local government settlements were
"back-loaded"-that is, they provided smaller wage increases in the first contract year than in later years. Twenty
contracts, covering 13 percent of the workers, provided for
no specified wage changes in the first year but called for
subsequent increases . Forty-six contracts, covering 17 percent of the workers, provided smaller increases in the first
than in later years . These 66 "back-loaded" settlements
provided wage adjustments averaging 3 .0 percent in the first
year and 5 .2 percent over the life of the agreements . Masked
by the averages, however, were the 62 "front-loaded" settlements, covering one-fourth of the workers. They provided
wage adjustments of 5.7 percent the first year and 4.3 percent annually over the contract life . The remaining contracts
were typically of 12-month duration .
Effect of series expansion . The expansion of the series to
include units of 1,000 to 4,999 workers doubled its coverage
of workers under 1984 settlements . (See table 1 .) In 1984,
local governments accounted for 47 percent of all workers
under settlements for 5,000 workers or more, and 83 percent
of those under settlements for 1,000 but fewer than 5,000.
State government settlements for bargaining units of 5,000
workers or more had average wage adjustments that were
about the same size as those for smaller units, for both the
first contract year and annually over the life of the contract .
The averages ranged from 3 .6 to 3 .9 percent . In local government settlements for the large bargaining units as well,
average adjustments were about the same as those for the
small units but only for the first contract year (5 .5 and 5 .4
percent) . Over the life of the contracts, settlements in local
government units of 5,000 workers or more had average
adjustments (6 .8 percent) that were larger than those in units
of fewer than 5,000 workers (5 .4 percent) .
Average wage adjustments for settlements are computed
by multiplying the adjustment in each unit by the number
of workers covered, and dividing the sum of the products
by the total number of workers under settlements . Therefore
the averages for all settlements with 1,000 workers or more
reflect both the increased proportion of local government
employees in the expanded series and the larger average
wage adjustments negotiated by local jurisdictions.
Table 1 . Number of workers and average (mean) wage
adjustments under State and local government
settlements, 1984
Measure
Total
Units with
1,000 to
4,999
workers
Units with
5,000
workers
or more
Number of workers :
All settlements . . . . . . . . . . . .
722,000
359,000
363,000
State government . . . . . . . . .
Local government . . . . . . . .
254,000
468,000
61,000
298,000
194,000
169,000
Average (mean) adjustments :
First year of contract :
All settlements . . . . . . . . . . . .
State government . . . . . . . . .
Local government
. . . . . . . .
Over the life of the contract :
All settlements . . . . . . . . . . . .
State government . . . . . . . . .
Local government
. . . . . . . . .
4.8
3.6
5.1
3.9
4.4
3.6
5.1
3.8
5.9
5.1
3.9
5.1
3.7
5 .4
5 .4
5 .4
5.5
6 .8
Compensation . The Bureau also measures compensation
(wage and benefit costs) changeS2 in units of 5,000 workers
or more . In 1984 settlements for such units, average compensation adjustments were larger for local than for State
government workers, as the tabulation below shows. (Data
exclude 59,000 workers in five units for which only wage
change data were available .)
First-year
a djustment
(percent)
Total . . . . . . . . . . . . .
State government . . . . .
Local govemment . . . .
5 .2
4 .3
6 .0
Annual
adjustment
over life of Number of
the contract
workers
(percent) (in thousands)
5 .4
4 .0
6 .6
304
140
164
Effective wage adjustments
In addition to information on new settlements, the series
measures changes put into effect in 1984 as a result of both
new and earlier settlements in State and local governments .
Effective wage adjustments are those that result from settlements in 1984, deferred changes made under agreements
negotiated earlier, and cost-of-living adjustment (COLA) provisions . Average effective wage adjustments (in percent) for
State and local government agreements with 1,000 workers
or more in 1984 were :
For workers
receiving
changes
For all
workers
(prorated)
All adjustments . . . . . . . . . . . . . . . . .
1984 settlements . . . . . . . . . . . . . . . . . .
6 .6
6 .6
5 .0
1 .9
COLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 .4
0 .0
Deferred adjustments . . . . . . . . . . . . . .
6.6
3 .1
Wage changes (increases and decreases) put into effect
in 1984 averaged 6.6 percent for the 1 .6 million workers
who received them . When prorated over the 2 .1 million
workers covered by major State and local government bargaining units, adjustments averaged 5.0 percent.
Only 2 percent of the State and local government workers
under major agreements (all in local government, mostly
transit) have COLA provisions . About 26,500 local government workers had COLA reviews in 1984 . Of these, 25,000
had COLA changes in 1984 averaging 1 .4 percent. Wage
adjustments stemming from COLA reviews in 1984 averaged
43 percent of the change in consumer prices during the
review period .
Data collection
State and local governments are asked to provide information on agreements covering 1,000 workers or more if
(1) a labor organization is recognized as the bargaining agent
for a group of workers, and settlements are embodied in
signed, mutually binding contracts; and (2) at least wages
are determined by collective bargaining . For units of 5,000
workers or more, data are collected on both wage and benefit
changes. For smaller units, only data on wage changes are
collected.
Comparison with private industry
The Bureau also publishes data on collective bargaining
settlements in private industry .' However, there are major
differences between bargaining in State and local government and in private industry . For example, collective bargaining in private industry is governed by the provisions of
the National Labor Relations Act and the Railway Labor
Act of 1926 . State and local government bargaining is controlled by a variety of laws . Some laws, for example, call
for binding arbitration as the final step of the negotiation
process if the parties cannot agree on the size of the wage
changes and other issues . Many laws prohibit strikes against
the government .
In many cases, the legislature plays a significant role in
the bargaining process . After an agreement is negotiated by
the executive branch, it is sent to the legislature for the
appropriation of funds . Because this procedure is time consuming, first-year wage increases sometimes reflect the time
lag between the date of agreement and the appropriation .
The "back-loading" of some contracts results from the legislative funding process; the size of the first-year adjustment
may be limited by the monetary appropriation previously
legislated for the fiscal year, while subsequent wage increases will be financed in future fiscal year budgets .
Because of these and other differences in bargaining practices, care should be used when comparing the size and
nature of the settlements in State and local government with
those in private industry . These differences are evident in
the characteristics of the settlements reached. For example,
cost-of-living adjustment (COLA) clauses cover only 2 percent of State and local government workers reflecting, in
part, the need to have funds appropriated for wage increases.
In private industry, 57 percent of workers under major
agreements have COLA coverage . Agreements without COLA's
tend to provide larger specified wage increases than those
37
MONTHLY LABOR REVIEW May 1985 e Research Summaries
with COLA'S . (Settlement data include specified first-year
and deferred wage changes but exclude potential wage changes
resulting from COLA clauses .) Another difference is that
pensions are frequently prescribed by law in State and local
governments and are not subject to bargaining, but in private
industry, pensions may be a bargaining issue.
State and local government settlements in 1984 were generally of shorter duration (averaging 20 months) than those
negotiated in private industry (31 months). Thirty-five percent of the State and local government workers were under
settlements lasting 12 months or less, compared with 9
percent in private industry .4
Bargaining activity, first half of 1985
Approximately 400,000 workers were under 84 contracts
that expired or reopened prior to January 1, 1985, but had
not been renegotiated as of December 31, 1984 . In addition,
880,000 workers are under 200 agreements due to expire
or reopen for wage negotiation between January and June
1985 . Nearly half the workers are employed in general government and about a third in education .
1:1
FOOTNOTES
Settlement data include specified first-year and deferred wage changes
but exclude potential wage changes resulting from cost-of-living adjustment
clauses which are based on unknown future changes in the Consumer Price
Index .
Z Percent changes in compensation (wage and benefit costs) are calculated
by dividing the newly negotiated changes in the wage and benefit package
by existing average hourly compensation, which includes the cost of previously negotiated benefits, legally required social insurance programs,
and average hourly earnings .
In calculating compensation change, a value is put on the wage and
benefit portions of the settlements at the time they are reached. The cost
estimates are based on the assumption that conditions existing at the time
of settlement will not change (for example, composition of the labor force
will remain constant) . The data, therefore, are measures only of negotiated
change, and not of total changes in employer cost .
3 See John J. Lacombe 11 and James R. Conley, "Major agreements in
1984 provide record low wage increases," Monthly Labor Review, April
1985, pp . 39-45 .
4
Additional data on State and local government agreements appears in
the May 1985 issue of Current Wage Developments.
Wages at motor vehicle plants
outpaced those at parts factories
HARRY B . WILLIAMS
Average wages of blue-collar workers in factories producing
motor vehicles exceeded those in independent motor vehicle
parts plants by 48 percent in May 1983, according to the
latest occupational wage surveys of motor vehicles and moHarry B . Williams is a labor economist in the Division of Occupational
Pay and Employee Benefit Levels . Bureau of Labor Statistics .
38
for vehicle parts. The surveys are part of the regular Industry
Wage Survey program conducted by the Bureau of Labor
Statistics and are the first occupational wage surveys of these
industries in nearly a decade .
At the five major producers of passenger cars and light
trucks (motor vehicle manufacturers) studied, hourly earnings of production and related workers averaged $12.13,
compared with $8 .20 an hour for the motor vehicle parts
work force . Among the jobs permitting comparison in the
North Central region (the region with the largest concentration of motor vehicle manufacturing), workers in motor
vehicles manufacturing consistently averaged more per hour
than their counterparts making parts. The earnings edge for
motor vehicle workers in maintenance and toolroom jobs
typically averaged between 10 and 20 percent; in custodial
and material movement jobs, between 25 and 35 percent;
and for other production jobs, up to 50 percent . Earnings
differences between the two industries reflect a combination
of factors, including location, differences in products produced, mix of occupational classifications, and extent of
labor-management agreement coverage . Virtually all workers in the auto plants studied were covered by such agreements, compared with about three-fifths of the parts production
workers .
Motor vehicles
Straight-time earnings of 424,134 production and related
workers in motor vehicle manufacturing averaged $12 .13
an hour in May 1983 .' Nearly nine-tenths of the work force
earned between $11 and $14 an hour ; one-third had earnings
within a 20-cent range-$11 .80 to $12.
Average earnings within individual regions were near the
nationwide average, ranging from $11 .84 an hour in the
South to $12 .33 in the Northeast. Hourly earnings of workers in Michigan, where just over two-fifths of the industry's
work force was employed, averaged $12 .18; in the rest of
the North Central region, earnings averaged $12 .08 . Such
differences in average pay by location reflect variations in
the occupational mix within individual factories and some
differences in wage scales among establishments in this highly
unionized industry .
The $12 .13 average for all production and related workers
in May 1983 was 119 percent higher than the $5 .54 average
recorded in a similar study conducted in December 1973 .z
On an annual basis, the average rate of increase was 7.7
percent.
Thirty-five occupations, selected to represent the industry's wage structure, worker skills, and manufacturing operations, accounted for about two-thirds of the production
work force . Nationwide, average hourly pay among these
jobs ranged from $14 .79 for metal and wood patternmakers
and $14 .70 for die sinkers (drop-forge dies) to $11 .20 for
janitors, porters, and cleaners . Maintenance jobs, such as
carpenters, electricians, millwrights, and pipefitters, typically had averages between $13.50 and $13 .75 an hour .